8/11/2009 @ 5:00AM

Fink's War

British hedge fund managers have plenty of gripes against the Labour government, whether over its failure to tackle European Union plans for a regulatory clampdown, or an imminent 50% tax on the super-rich. However, few have addressed their grievances with the gusto of Stanley Fink.

The former head of powerful fund of funds concern Man Group, is emerging as one of the Conservative Party’s biggest donors. In February he gave 1 million pounds ($1.7 million) in cash to the party, taking his total contributions to around 1.45 million pounds ($2.5 million), according to records collected by Britains Electoral Commission.

By contrast, fellow treasurer and former billionaire Michael Spencer, founder and chief executive of inter dealer broker
ICAP
, has given the party a total of 155,000 pounds ($263,000) to date. Fink is also the cotreasurer (or chief fund-raiser) of the Conservative Party, which is tipped to win the next general election. In July 2008, he cofounded International Standard Asset Management, which manages the International Standard Macro Fund, a macro strategy fund.

He’s not the only hedge fund honcho throwing money at the Conservatives. Hugh Sloane, cofounder of Sloane Robinson, has given the party a total of 284,000 pounds ($482,500) to date. Paul Ruddock of Lansdowne Partners has donated just over 309,500 pounds ($525,000), including 50,000 pounds ($85,000) in cash in January, while Alan Howard of Brevan Howard Asset Management has contributed 83,000 pounds ($141,000) to the partys coffers, according to Electoral Commission data.

So whats behind Fink’s generosity? “The Conservative Party has been very slow to accept the need for greater hedge-fund regulation,” says Michael Oakeshott, the House of Lords Treasury spokesman of the rival Liberal Democrats party. The Liberal Democrats support the European Unions proposals for limits on leverage and reporting requirements for hedge funds. “The Conservatives are adopting a hysterical, antiregulation view,” he adds.

The Conservatives argue that the EUs proposals are “ill conceived” and “badly drafted,” according to James Sassoon, advisor to George Osborne, the Conservative Party’s Treasury spokesman. Osborne is likely to be Britains next chancellor of the Exchequer, the British equivalent of the head of the Treasury Department.

The Conservatives are not ruling out the possibility that some funds could face more regulation, however. Sassoon says his party is outlining new plans for regulation if it sweeps into power. “The Bank of England would have clear powers to access information from investment managers so that it was able to exercise proper oversight of any institutions that could pose a systemic risk,” he says. The party is proposing to hand powers for banking, and possibly hedge-fund supervision, back to the Bank of England, and scrap the current Financial Services Authority.

Also on the partys to-do list is dealing with another pet peeve of hedge fund managers: the governments plans to raise the top rate of income tax to 50% next year. Though it is not a firm commitment, scrapping the tax is on the agenda shortly after the immediate priority of reversing proposed increases to national insurance contributions, which fund the health system

But the Conservative Party’s potential policies on hedge funds has nothing to do with Fink’s support, the fund-raiser himself says. Rather, it is based on the “needs of the country” and his “enormous respect of and liking for” David Cameron, the party’s leader, and Osborne. Labor Prime Minister Gordon Brown, he says, has “generally sought to neuter or dilute many of the best innovations” of his predecessor, Tony Blair.

While Fink says he would “not seek to apply any direct influence through my role or my donations, which are unconditional,” he says he hopes and believes that the Conservatives “will have a more enlightened view of what is needed to retain and grow a major source of invisible export earnings and jobs for our country.”

Fink says he became the cotreasurer because he was asked to take on the role. His sizable gift reflects his belief “that when one leads a fund-raising campaign, it is morally easier to ask others for money if one makes a lead donation,” he says.

While stopping short of saying that Finks intention is to push his party towards laxer regulation of hedge funds, Liberal Democrat Oakeshott of the Liberal Democrats says: “I dont think they are looking at [regulation] objectively. They are anti-European and have been bankrolled by hedge funds.”